Stewart Corporation is a major automobile manufacturer. It purchases steering wheels from Coase Corporation. Annual demand is 10,400 steering wheels per year or 200 steering wheels per week. The ordering cost is $100 per order. The annual carrying cost is $13 per steering wheel. It currently takes 1.5 weeks to supply an order to the assembly plant.

Required:

1. What is the optimal number of steering wheels that Stewarts managers should order according to the EOQ model?
2. What is the total annual cost of ordering and storing steering wheels at the economic order quantity?
3. How many orders will be placed per year

5. Calculate the reorder point, assuming that both demand and purchase-order lead time are known with certainty? Explain what your result indicates.
6. Suppose that weekly usage of steering wheels fluctuates between 150 and 250 units, although weekly expected demand remains constant at 200 steering wheels. What level of safety stock should the materials and parts manager keep on hand? What is the new reorder point for the steering wheels?